Clutha District Council v Otago Regional Council
[2022] NZHC 510
•18 March 2022
IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE
CIV-2020-412-000113
[2022] NZHC 510
BETWEEN CLUTHA DISTRICT COUNCIL
Applicant
AND
OTAGO REGIONAL COUNCIL
Respondent
Hearing: 30 June 2021 Appearances:
P J Page and S R Peirce for the Applicant
P A C Maw and M A Mehlhopt for the Respondent
Judgment:
18 March 2022
JUDGMENT OF NATION J
Introduction
[1] A District Council had a consent to take water from the Clutha/Mata-Au River for a community water scheme. It wanted to renew that consent for a period of 35 years. The Environment Court fixed the duration at 25 years, in part because water from the scheme was being used for dairy shed wash. The District Council says that end use of the water was not a relevant concern. It appeals the Environment Court’s decision.
Background
[2] The Clutha District Council (District Council) had a resource consent to take water from the Clutha/Mata-Au River (the river) for the Stirling (Bruce) Water Scheme (the scheme) that expired on 1 September 2018. The scheme provides water for
CLUTHA DISTRICT COUNCIL v OTAGO REGIONAL COUNCIL [2022] NZHC 510 [18 March 2022]
distribution to rural and urban destinations, including farming properties in the Clutha district, the townships of Stirling and Benhar, and the Cherry Lane suburb in Balclutha.
[3] The District Council applied to the Otago Regional Council (the Regional Council) for a new consent to take water from the river for the scheme. Under the Regional Plan: Water for Otago (the Regional Water Plan), the application was for a controlled activity. In granting a new consent, the Regional Council could decide the duration of the new consent. The District Council applied for 35 years, the maximum available under the Resource Management Act 1991 (RMA).1 The Regional Council granted the consent for 25 years.
[4] The District Council appealed the Regional Council’s decision to the Environment Court. In a decision on 19 November 2020, the Environment Court upheld the decision made by the Regional Council.2 The District Council appealed the Environment Court’s decision to this Court.
[5]An appeal is allowed only as to argued errors of law.
[6] In making its decision, the Environment Court considered that a significant proportion of the water taken from the river for the scheme was used by dairy farms for washing down dairy sheds. Before this Court, the District Council contended this was an error of law because the potential or actual effects of how water was used by people receiving water from the scheme were too remote and lacking in a sufficient nexus to the actual authorised take for those effects to be a relevant consideration in determining an appropriate duration for the new consent.
[7] Although that was the crux of the appeal, in its notice of appeal, the District Council contended there had been seven errors of law and 15 questions of law which this Court had to consider on appeal. I deal with the argued questions of law under various headings.3
1 Resource Management Act 1991, s 123(d).
2 Clutha District Council v Otago Regional Council [2020] NZEnvC 194.
3 One of the District Council’s original grounds of appeal was that there had been a breach of natural justice because the Environment Court treated the end use of the water for dairy shed wash as a relevant consideration in making its decision, arguably, without giving notice to the District Council it was going to do so and without giving them the opportunity to be heard. At the outset
Did the Environment Court err in having regard to an irrelevant consideration, namely the potential for contamination from the use of water for dairy shed wash, in deciding to limit the duration of the water take consent to 25 years?
The Environment Court decision
[8] It is clear the Environment Court did regard the particular end use of the water in washing dairy sheds and the actual or potential environment effects of that in setting the term of 25 years for the new consent.
[9] Under the operative regional plan, the use of water for human consumption, not community water supply per se, was to be prioritised.4 The evidence was that the scheme distributes water for human and stock consumption, also for dairy shed use. Less than 20 per cent of water was supplied for human consumption. The range of uses meant that, in terms of the relevant policy of the operative regional plan, they were unable to give priority to the scheme on the basis it was for the use of water for human consumption.5
[10] The Court referred to the lack of knowledge about the uses for water risking undermining the Regional Council’s functions in relation to the establishment, implementation and review of objectives, policies and methods to achieve integrated management of the natural and physical resources of the region (with reference to s 31 of the RMA).6
[11] They said, if the water was being supplied for human use (only) and maybe stock water consumption, they “would have [had] less difficulty with the proposition that a 35 year duration was appropriate”.7 They concluded “the facts are that there are a wider range of uses for the scheme’s water which have not been properly assessed by the appellant [the District Council]”.8 This and the fact the planning regime was in a state of transition weighed in favour of a shorter duration for the consent.9
of the appeal hearing, Mr Page, for the District Council, advised this Court that this ground of appeal was not going to be relied on or advanced in the High Court.
4 At [50].
5 At [52].
6 At [73].
7 At [76].
8 At [76].
9 At [74].
[12] The Court’s concern as to these matters could not be adequately addressed through adding a condition to the consent effectively constraining the supply of new water to farms with an up to date environment management plan. Such a condition would not address any present-day risk.10
[13] After referring to such matters, the Environment Court said they were “not persuaded to come to any different decision to the Regional Council on duration, albeit that in reaching this conclusion we take a different view on the effects of the activity”.11
The District Council’s submissions
[14]The District Council submitted:
(a) The Environment Court erred in considering the end use of the water because they went beyond the scope of issues raised in the proceeding through the notice of appeal to the Environment Court and a joint statement of facts and issues dated 6 March 2020 filed by the parties before the hearing in the Environment Court. The evidence before the Environment Court focused on the effects arising from the take of water from the river, but not its subsequent use.
(b) The scope of relevant considerations was also limited by the District Council’s application being for consent to a controlled activity. An application for a controlled activity must be granted.12 The Regional Council may impose conditions only for those matters over which a control is reserved to the Regional Council in the Regional Water Plan.13 The potential end use of the water from the scheme was not a matter as to which the regional plan had reserved control to the Regional Council.
(c) The end use of water from the scheme and its effects were too remote, consistent with the approach of the Supreme Court in West Coast ENT Inc
10 At [62].
11 At [75].
12 RMA, s 87A(2)(a).
13 Section 104A(b)(ii).
v Buller Coal Ltd and the High Court in Te Rūnanga o Ngāti Awa v Bay of Plenty Regional Council and Aotearoa Water Action Inc v Canterbury Regional Council, the Environment Court in Beadle v Minister of Corrections and Cayford v Waikato Regional Council.14
The common thread of those cases was that the effects in issue were too remote because they resulted from an end use of the resource by third parties whose activities were not controlled by the consent.
(d) The consent was not for the end use of the water once it was connected to the scheme. Methods of delivery and the use of water beyond the end point at which the water had been delivered to a property was left to a third party. The District Council could not know or control all the possible uses that a third party might use the water for, nor did they have the authority or responsibility to monitor such uses.
(e) The Environment Court’s concern should have been only with the effects of the take up to the point at which water was supplied to the scheme, that is as to the environmental effects of the abstraction of water from the river to the extent authorised and whether that was an efficient and sustainable use of that resource.
(f) This approach was consistent with the objectives, policies and rules of the Regional Water Plan and the proposed change 7 (PC7) to that plan which had been notified before the hearing in the Environment Court.
(g) The effects of potential contamination by subsequent use would be subject to assessment and consideration by the Regional Council because discharges of potentially contaminated water from dairy shed wash could require resource consents under s 15 of the RMA. This was the responsibility of the Regional Council in the context of its regional plan.
14 West Coast ENT Inc v Buller Coal Ltd [2013] NZSC 87, [2014] 1 NZLR 32; Te Rūnanga o Ngāti Awa v Bay of Plenty Regional Council [2020] NZHC 3388, [2021] NZRMA 76; Aotearoa Water Action Inc v Canterbury Regional Council [2020] NZHC 1625, [2020] NZRMA 580; Beadle v Minister of Corrections EnvC Wellington A074/2002, 8 April 2002; Cayford v Waikato Regional Council EnvC Auckland A127/98, 23 October 1998.
The Regional Council’s submissions
[15]The Regional Council contended:
(a) The Environment Court is a specialist tribunal with a role of enquiry and assessment as to all RMA principles and purposes relevant to matters that come before it. The scope of its enquiry is not limited or prescribed by the manner in which parties choose to put issues before it.
(b) The issue before the Court was about the duration of the new consent. The Regional Council and then the Environment Court had a discretion as to what the appropriate term should be. In determining that, it was entitled to have regard to the purposes of the RMA, in particular s 5. It was required under s 104 to consider the actual and potential adverse effects of the activity on the environment. There was nothing in the regional plan to limit its consideration of the effects of the water take in the way the District Council contended for.
(c) The Environment Court also had to have regard, as it did, to the Proposed Plan Change 8 (PC8) to the Regional Water Plan. That change required it to adopt a holistic and integrated approach in considering all effects on the environment of the take, particularly the duration of the take which was the subject of its decision.
(d) The feature of the case before the Environment Court distinguished from Cayford and Buller Coal was the nexus between the water take and the consequential effects of the water being used for dairy shed wash purposes. That use arose directly from the consented take and supply of water to the community water scheme. Water was being used in that way, in the same way as it was available for stock water and the general use of ratepayers whose properties were connected to the scheme. Knowing the water was being used in that way, the Environment Court could not ignore the effects of that use.
[16] As to whether the end use of water for the scheme for dairy shed use was too remote for those effects to be a relevant consideration, the Regional Council’s submissions are reflected in the discussion that follows.
Discussion
[17] I accept the Regional Council’s submission that the Environment Court was not limited by either the terms of the District Council’s original application for a water permit or the terms of the notice of appeal from considering the potential contamination of groundwater from the discharges of dairy shed wash onto land.
[18] In its notice of appeal to the Environment Court, the District Council made reference to the “adverse effects” arising from the water take activity by suggesting the Environment Court erred by not considering the District Council’s history of managing such effects and whether conditions on the consent could manage such effects. The notice of appeal therefore did not prevent the Environment Court from considering adverse effects as they were specifically mentioned in it.
[19] Further, I do not accept that, with the way this appeal proceeded, the parties had limited the scope of matters to be considered in a way that did not permit the Environment Court to have regard to the actual or potential effects on the environment of the use of water from the scheme for dairy shed wash.
[20] After a telephone conference with the parties’ counsel on 13 July 2020, the Judge directed counsel to file a joint memorandum identifying issues relevant to the determination of weight to be given to differing provisions relevant to the determination of the consent duration.
[21] Through their memorandum of 17 July 2020, counsel advised the Environment Court that, amongst the issues relevant to weighting, was the issue:
When considering the matters listed under Policy 6.4.19 [of the Regional Water Plan] when setting the duration of a resource consent, is a 35 year consent term appropriate in this instance or are there circumstances which warrant a reduction from the maximum term?
(a) Is a 35 year consent term necessary for the duration of the purpose of the use?
(b) Is there any uncertainty as to the adverse effects of the water take on the environment that might warrant a consent term of less than 35 years?
[22]One agreed fact was:
The proposal is to provide water to the South Bruce Rural Water Supply Scheme which is a recognised schedule 1B community drinking supply in the Regional Plan: Water for Otago (RPW).
[23] The memorandum said the District Council and Regional Council did not agree on a number of facts. As to those matters, the District Council said it would adduce evidence to establish various facts which the Regional Council denied. One of those assertions was that “[t]here are no present or anticipated future adverse effects on the aquatic environment of the Clutha River/Mata Au arising from the water take”.
[24] I thus accept the Court’s consideration of potential land discharges of dairy wash effluent onto land was not inconsistent with the agreed statement of facts and issues. Even if it had been, with the way evidence was adduced as to the extent water from the scheme was being used for dairy shed wash, there would have been no error in the particular way the Environment Court considered this. Evidence as to that use of the water was given by the District Council’s own witness. The Court made it clear during the hearing that it considered this evidence relevant through the questions the Judge asked the witness about such matters. In particular, Judge Borthwick raised with counsel and witnesses the way this was relevant to taking an integrated approach in considering both water take and associated discharges onto land in the management of activities under the RMA. Counsel for the District Council specifically addressed this issue in reply submissions.
[25] I do not accept that the hearing in the Environment Court proceeded on the basis that the way in which water from the scheme was ultimately used was irrelevant.
[26] The parties had agreed the single issue to be decided by the Environment Court was the duration of the consent term. As to that, the breadth of matters which the parties accepted had to be considered in the Environment Court was apparent from their submissions and evidence presented in support of those decisions. In their submissions to the Environment Court, the District Council addressed the following:
(a) the environment being assessed;
(b) the activity status of the application;
(c) the actual or potential effects on the environment;
(d) policy 6.4.19 of the Regional Water Plan;
(e) iwi management plans;
(f) PC7;
(g) the National Policy Statement for Freshwater Management (amended 2020) (NPSFM 2020); and
(h) a s 128 review condition.
[27] Mr Heller, a former hydrologist and environmental and water resources consultant, gave expert evidence for the District Council. In discussing the environment effects, Mr Heller said:
There are no known measurable effects on water quality of the Clutha River as a result of the water take, as the primary use of the water is for human consumption and stock water. Water is not used for irrigation. Any adverse effects arising from water used for dairy shed supply are managed by each farm’s dairy waste water system that is subject to a separate consent process with the ORC.
[28] In discussing matters under the heading “efficiency”, Mr Heller said the Regional Council’s recommending report’s conclusion as to the current water use required for the scheme had not taken into account “the additional uses for the water such as stock water and dairy shed use, which comprises approximately 80% of the water taken”.
[29] With reference to climate change, Mr Heller commented that additional impacts of climate change upon efficiencies in water supply for human and stock drinking water are considered to be small. He observed “[s]cheme water used for dairy shed washdown appears to be within certain published guidelines […] and is unlikely to significantly alter as a result of climate change”.
[30] Even if the parties had sought to limit the issues for consideration by the Council in the manner suggested by the District Council, that would not have prevented the Environment Court from considering what, to it, was a relevant issue.
[31] Under s 290(1) of the RMA, the Environment Court had “the same power, duty and discretion” in dealing with the appeal as the consent authority. Under s 290(2), it could “confirm, amend or cancel the decision to which the appeal relates”.
[32]As Dunningham J said in Saddle Views Estate Ltd:15
[w]here the parties[’] understanding of the applicable law is considered by the Court to be either incorrect, or to admit consideration of some relevant factor, there can be nothing objectionable about the Court drawing that to the parties attention and seeking further submissions on it. This situation differs from a simple inter partes claim where the onus is on the parties to decide what claims to plead and what evidence to adduce.
[33]As the Supreme Court has stated:16
[Section 290 of the RMA] confer[s] an appellate jurisdiction that is not uncommon in relation to administrative appeals in specialist jurisdictions. … they contemplate that the hearing of the appellate tribunal will be “de novo”, meaning that it will involve a fresh consideration of the matter that was before the body whose decision is the subject of appeal, with the parties having the right to a full new hearing of evidence. When the legislation provides for a de novo hearing it is the duty of the Environment Court to determine for itself, independently, the matter that was before the body appealed from insofar as it is in issue on appeal. The parties may, however, to the extent that is practicable, instead confine the appellate hearing to specific issues raised by the appeal.
[34] There was no error in the Environment Court considering the use of water from the scheme for dairy shed washing on the basis this was associated with the taking of water for a controlled activity.
[35] It was agreed in the Environment Court that the activity was classified as a controlled activity under the Regional Water Plan. The classification of it was not affected by the change in status under PC7 because the District Council’s application was lodged before PC7 was notified. The Environment Court expressly considered
15 Saddle Views Estate Ltd v Dunedin City Council [2017] NZHC 1727, (2017) ELRNZ 144, at [127].
16 Waitakere City Council v Estate Homes Ltd [2006] NZSC 112, [2007] 2 NZLR 149 at [28]. Footnotes omitted.
the appeal on the basis the proposed take was for a controlled activity under that Regional Plan.
[36] The District Council submitted the matters the Environment Court could consider were limited to matters over which control had been reserved in the relevant plan.
[37] Section 87A(2) of the RMA provides that, if an activity is described in a plan as a controlled activity, a resource consent is required for the activity and the consent authority must grant a resource consent (subject to limited exceptions). The consent authority’s power to impose conditions on the resource consent is restricted to the matters over which control is reserved in the relevant plan.17
[38] In determining the appropriate duration for the water permit, the Environment Court was required to consider the matters contained in s 104, to the extent that these matters were relevant for the duration of the activity. These include: any actual or potential effects on the environment,18 any relevant planning instrument,19 and any other matter the Court considers relevant and reasonably necessary to determine the application.20
[39] The Court of Appeal in Ngati Rangi Trust v Genesis Power Ltd held that, in determining the appropriate duration of water permits granted to a large electricity generator:21
The Environment Court was bound to evaluate the application in light of the fundamental purpose of the Act, namely the promotion of “the sustainable management of natural and physical resources”: s 5. It had to do that on the basis of the evidence before it, in light of relevant policy statements, plans and proposed plans. If the Court considered it had insufficient material before it to enable a proper evaluation of certain effects, then it would have been appropriate to adjourn the hearing to enable further evidence of a defined character to come before it. Alternatively, it was bound to decide the matter on the basis of what was before it. In that regard, it must be remembered that resource management law is not “black letter” law: there will always be more
17 Section 104A(b). 18 Section 104(1)(a). 19 Section 104(1)(b). 20 Section 104(1)(c).
21 Ngati Rangi Trust v Genesis Power Ltd [2009] NZCA 222, (2009) 15 ELRNZ 164 at [62] per Chambers J.
evidence that could be called on every application or appeal. Decision-making bodies in this area often have to make decisions based on incomplete data.
[40] The District Council recognised the effects on the environment of the proposed take and use of water for the water scheme were relevant to the issue of the appropriate duration of the consent through the evidence it presented for the Environment Court and the submissions that were made in support of the appeal. The District Council also recognised the Environment Court’s assessment of the effects related to the duration of the consent and vice versa through proposing that any uncertainty as to future effects of the proposed activity could be adequately mitigated through attaching review conditions to the consent that could potentially reduce the duration of the consented activity.
[41] Provided the effects of the use of water from the scheme were not too remote, it was appropriate for the Environment Court to consider these effects for the purpose of achieving integrated management under the RMA22 and for the purpose of promoting “the sustainable management of natural and physical resources”.23
[42] The District Council’s primary challenge over this was that the application for a take was for the purpose of supplying water to the scheme and both the end use of that water and the effects of that use were too remote to be relevant considerations under the RMA.
[43] The Environment Court was able to have regard to the consequential effects of the end use of the resource that is the subject of the resource consent application, but with limits of nexus and remoteness.24
[44] In Te Rūnanga o Ngāti Awa v Bay of Plenty Regional Council, the High Court cited, with approval, the statement from the Environment Court:25
Nexus here refers to the degree of connection between the activity and the effect, while remoteness refers to the proximity of such connection, both being
22 Section 30(1)(a).
23 Section 5.
24 Beadle v Minister of Corrections, above n 14, at [88].
25 Te Rūnanga o Ngāti Awa v Bay of Plenty Regional Council, above n 14, at 81, citing Te Rūnanga o Ngāti Awa v Bay of Plenty Regional Council [2019] NZEnvC 196, (2019) 21 ELRNZ 539 at [61].
considered in terms of causal legal relationships rather than simply in physical terms. Experience indicates that these assessments are likely to be in terms of factors of degree rather than of absolute criteria and so be matters of weight rather than intrinsically dispositive of any decision.
[45] In Te Rūnanga o Ngāti Awa v Bay of Plenty Regional Council, the appeal before the High Court concerned consents to expand an existing spring water extraction and bottling operation, primarily to bottle water and export that bottled water overseas.26 At issue was whether and to what extent the Environment Court could consider the environmental and cultural effects for Māori arising out of the use of plastic bottles and the discarding of plastic bottles overseas. Gault J decided, consistent with the judgment of the High Court in Aotearoa Water Action Inc v Canterbury Regional Council, that the effects of the adverse effects of consumers discarding plastic bottles were too indirect or remote to require further consideration on the application for a water resource consent to take water from the aquifer and, thus, outside the scope of what could be considered on a consent application.27
[46] In Pukenamu Estates Ltd v Kapiti Environmental Action Inc, one of the issues before the Environment Court and then the High Court was whether a consent authority could consider the effect of earthworks (road and building platforms) as an effect of a subdivision for which approval was sought under the RMA.28 In the High Court, Ronald Young J held the Environment Court was required (by s 104 of the RMA) to consider the actual potential effects of the environment of allowing the activity (here, the subdivision). The applicant had provided little information relating to the earthworks that would be required with the subdivision because it was intending to leave it to the purchasers to apply. In rejecting the approach of the appellant, Ronald Young J said:
[44] … Section 104 is concerned with the actual and potential effects on the environment of allowing the activity. The activity here is the subdivision. In part the Appellant’s approach is predicated on the proposition that somehow assessment of effect is limited to only some actual effects of the subdivision. This cannot be correct. The actual and potential effects of a subdivision are well beyond the simple drawing of lines on a map. The section is concerned with actual effect if the activity is approved. Thus the focus of s104 (and s105 as relevant) is on individual actual effect (and potential) of allowing a subdivision of that land. One can envisage subdivisions where minimal
26 Te Rūnanga o Ngāti Awa v Bay of Plenty Regional Council, above n 14.
27 Aotearoa Water Action Inc v Canterbury Regional Council, above n 14.
28 Pukenamu Estates Ltd v Kapiti Environmental Action Inc HC Wellington AP106/02, 18 June 2003.
roading is required, for example, the subdivision of land adjacent to an existing road, or of flat land where little or not [sic] excavation may be required for building sites. Actual and potential effect of the subject subdivision is the focus in s104(1)(a).
[45] Nor do I consider the fact that other applications for resource consent may be required for some or all of earth works consequent upon the subdivision as prohibiting consideration of them as a effect under s104 or s105. To interpret s104 in this way would significantly downgrade the effect of subsection (1)(a). It would also prevent the local authority and subsequent appellate bodies from looking holistically at an activity requiring resource consent where, as here, the activity is non complying and where, as here, further resource consents may be required before the subdivision can be undertaken.
[47] In Cayford v Waikato Regional Council, the Environment Court held the relevance of effects on the environment of a proposed activity is not dependant on the need or otherwise for resource consents or whether effects can be the subject of controls.29
[48] The Court also referred to a statement from Auckland City Council v Auckland Regional Council that “[e]ffects which flow from allowing the activities for which the consent is sought may also include those from other activities which may inevitably follow”.30
[49] In Beadle v Minister of Corrections, the Minister was seeking consent for earth works and stream works needed for the site of a prison facility.31 He expected the Court to have regard to that ultimate purpose as one that would provide public benefits in Northland. The Environment Court held that submitters were entitled to challenge those claims and they were entitled to try and prove that facility would have adverse effects on the environment that should be offset against its positive benefits, and it ought to prevail over them. The Environment Court concluded they were “able to have regard to the intended end-use of a corrections facility, and any consequential effects on the environment that might have, if not too uncertain or remote”.32
29 Cayford v Waikato Regional Council, above n 14, at 8.
30 Auckland City Council v Auckland Regional Council EnvC Auckland A101/97, 25 August 1997 at [7], cited in Cayford v Waikato Regional Council, above n 14, at 9.
31 Beadle v Minister of Corrections, above n 14.
32 At [91].
[50] The approach adopted by the Environment Court in Beadle was referred to without criticism by the Supreme Court in Buller Coal:33
We accept that effects on the environment of activities which are consequential on allowing the activity for which consent is sought have sometimes been taken into account by consent authorities. This is particularly so in respect of consequential activities which are not directly the subject of control under the RMA. But questions of fact and degree are likely to arise as is apparent from the judgment of the Environment Court in Beadle v Minister of Corrections.
[51] So, the Environment Court in this case was required to consider the environmental effects of the consented activity because they were relevant to determining the appropriate duration of the consent. Provided there was a sufficient nexus between consequential effects and they were not too remote, they had to be considered by the Environment Court for the purpose of promoting “the sustainable management of natural and physical resources”.34 They could not be ignored by the Environment Court simply because the consequential use of the water and its effects was subject to management under the RMA and by the Regional Council in accordance with ss 15 and 30(f) of the RMA.
[52] I consider the end use of water for dairy shed wash and its subsequent discharge to the environment had a sufficient nexus to the take and were not so remote as to be matters which the Environment Court could not consider when fixing the duration for the water take consent for the scheme. The Court therefore had to have regard to these effects under s 104(1)(a) of the RMA.
[53] The use of water from the scheme was more than inevitable or foreseeable. It was already happening. Up to 30 per cent of water supplied to the scheme was being used for dairy shed wash. That use of the water was as much a reality as the use of water for human consumption, as part of a potable water supply.
[54] In a physical sense, the District Council, through the scheme, was providing water directly to the properties on which water was being used for dairy shed wash. The scheme was a piped water scheme owned by the District Council. Water was
33 West Coast ENT Inc v Buller Coal Ltd, above n 14, at [119], citing Beadle v Minister of Corrections, above n 14.
34 RMA, s 5.
piped from the point at which water was supplied from the take to the scheme and delivered to the properties which it supplied, including 28 dairy farms. On those properties, water was stored in tanks and then used for the landowner’s purposes. In that way, the District Council, through the scheme, supplied water for dairy shed wash.
[55] It was the District Council who determined to whom water would be allocated as part of the scheme. The District Council, to a certain extent, was thus able to control to a significant extent how water from the scheme was used. With the Council permitting and facilitating the supply of water from the scheme to dairy farms where it was being used for dairy shed wash, the Council was permitting and facilitating the water which was being taken for the scheme to be used for dairy shed wash.
[56] The use of water for dairy shed wash and the associated discharges of it was thus physically much more connected to the initial take than was the case with the potential discarding of water bottles produced in the water bottling activities that were considered in Te Rūnanga o Ngati Awa and Aotearoa Water, or the burning of coal in Buller Coal.
[57] Section 104(1)(b)(iii) required the Environment Court to also consider any relevant national policy statement. The parties agreed that one of the planning documents which would be relevant to the Environment Court’s consideration of the matter before it was the NPSFM 2020 and what is described in that document as the fundamental concept – Te Mana o te Wai.
[58] As the Environment Court has recognised, the NPSFM 2020 intends for the health and wellbeing of freshwater bodies to be at the forefront of decisions about fresh water. Inherent in the definition of Te Mana o te Wai is a connection between water and the broader environment.35 Policy 3 of the NPSFM 2020 requires that:
Freshwater is managed in an integrated way that considers the effects of the use and development of land on a whole-of-catchment basis, including the effects on receiving environments.
35 Aratiatia Livestock Ltd v Southland Regional Council [2019] NZEnvC 208 at [16]-[21].
[59] Clause 3.2(2)(e) requires every regional council to give effect to Te Mana o te Wai and, in doing so, to “adopt an integrated approach, ki uta ki tai to the management of freshwater”.
[60] The Environment Court also had to promote “the sustainable management of natural and physical resources” when considering the effects of the activity.36
[61] In the context of the issues it was considering and on the evidence before it, the way in which the Environment Court had regard to the potential for contamination from dairy shed wash appropriately recognised the purposes and scheme of the RMA and the NPSFM 2020.
[62] Accordingly, there was no error of law in the way the Environment Court had regard to the way water from the scheme was used for dairy shed wash in determining that the appropriate duration for the water take consent was 25 years.
[63] I accordingly answer the following question of law included in the notice of appeal as follows:
Did the Environment Court err by considering that the effects arising from the discharge of contaminants subsequent to the use of water by third parties was relevant to the determination of consent duration?
No.
Did the Environment Court err in its consideration of planning documents relevant to the appeal it was considering?
[64] As to a number of the claimed errors of law in this regard, the District Council acknowledged the validity of its arguments turned on whether the Environment Court could have regard to the end use of water from the scheme and the environmental effects of that use in the way it interpreted and applied the policy.
36 RMA, s 5.
[65] With this Court holding that the Environment Court could consider the consequential end use of water from the scheme and the environmental effects of that, that premise for error has not been made out.
[66] As already referred to, the Court of Appeal in Ngati Rangi Trust v Genesis Power Ltd held that, in determining the appropriate duration of water permits granted to a large electricity generator:37
The Environment Court was bound to evaluate the application in light of the fundamental purpose of the Act, namely the promotion of “the sustainable management of natural and physical resources”, s 5. It had to do that on the basis of the evidence before it in light of relevant policy statements plans and proposed plans.
[67] The parties agreed the Regional Water Plan was a planning document relevant to the issues which the Environment Court had to consider. One of the policies in the Regional Water Plan was policy 6.4.19, which requires:
When setting the duration of a resource consent to take and use water, to consider:
(a) the duration of the purpose of use;
…
(d) the extent to which the risk of potentially significant, adverse effects arising from the activity may be adequately managed through review conditions;
…
[68] In the notice of appeal, the second ground of appeal was that the Environment Court had erred in its interpretation of policy 6.4.19(a) and (d) of the Regional Plan by considering that “end use” effects are relevant to its determination of consent term.
[69] In the Regional Water Plan, under the heading “Integrated Water Management”, one of the Council’s policies was:38
In managing the taking of groundwater, avoid in any aquifer:
(a) Contamination of groundwater or surface water; and
37 Ngati Rangi Trust v Genesis Power Ltd, above n 21, at [62], per Chambers J.
38 Regional Water Plan, policy 6.4.10A5.
…
[70]In its decision, the Environment Court stated:39
Given that up to 30% of the existing take and use of water is to supply dairy sheds, the District Council has not discharged its persuasive burden of providing evidence that the court, with any level of confidence, can rely on to make findings about the existing or future state of water quality within the command area. It follows we are unable to satisfy ourselves under Policy 6.9.19(d) of the operative Regional Plan that the risk of potentially significant adverse effects arising from this activity may be adequately managed through review conditions. In any event, for reasons that we will come to, we doubt the efficacy of the proposed review condition.
[71] It was agreed PC7 was a relevant proposed plan which had to be considered by the Environment Court.
[72] The s 32(1) evaluation report for PC7 explained that the purpose of PC7 was to provide an interim regulatory framework for the assessment of applications to take and use surface water before the new regional plan becomes operative, which is expected to be 31 December 2025. The National Policy Statement for Freshwater 2014 (updated 2017) requires regional councils to maintain or improve the quality of fresh water through, for instance policy A3:
… making rules requiring the adoption of the best practicable option to prevent or minimise any actual or likely adverse effect on the environment of any discharge of a contaminant into fresh water, or onto or into land in circumstances that may result in that contaminant (or, as a result of any natural process from the discharge of that contaminant, any other contaminant) entering fresh water.
[73]And policy C1:
… managing fresh water and land use and development in catchments in an integrated and sustainable way to avoid, remedy or mitigate adverse effects, including cumulative effects.
[74] The report concluded that PC7 does not entirely give effect to these policies because the new regional plan is anticipated to more thoroughly cover them.
39 Clutha District Council v Otago Regional Council, above n 2, at [61]. Footnotes omitted.
[75] In its decision, the Environment Court said PC7 sought to limit the circumstances in which existing resource consents to take and use surface water could be granted. The Environment Court noted policy 10A.2.3 contemplated a consent duration exceeding six years might be granted for non-complying activities only in certain circumstances, namely:40
(a) the activity will have no more than minor adverse effects (including no more than minor cumulative effects) on the ecology and the hydrology of the surface water body (and any connected water body) from which the abstraction is to occur; and
(b) the resource consent granted will expire before 31 December 2035.
[76]The Environment Court said:41
The application of Policy 10A.2.3 of PC7 to the facts is also problematic for the reason that the evidence is not capable of proving to the requisite standard that the proposal will have no more than minor adverse effects (including no more than minor cumulative effects) on the ecology of the Clutha River/Mata- Au (and any connected water body) from which the abstraction is to occur.
[77] The District Council submitted the Environment Court’s third error of law was in giving weight to the proposed PC7 despite determining that the taking of water for the scheme was a controlled activity pursuant to ss 88A and 104A of the RMA. The District Council particularised that error by referring to the Environment Court having considered the effects of the end use of water from the Bruce water scheme in deciding that the evidence had not proved that the water take from the river would have no more than minor effects on the ecology of the river.
[78] That particular issue had to be considered only if the Court had to decide whether the application had been for a controlled activity under PC7. The Court accepted that PC7 was not relevant in that way. The Court did not consider policy 10A.2.3 in this manner. Instead, their observation was relevant in the context of its appropriate consideration of the effects of the end use of water.
40 At [22].
41 At [63].
[79] In considering the weight to be given to PC7 and evidence relevant to that, the Environment Court also referred to PC8 on discharge management. The District Council acknowledged that the provisions in that change had been notified.
[80] Currently in Otago, animal discharges were managed under the Regional Water Plan, particularly a rule which prohibited the discharge of animal waste, directly into water or onto land in circumstances where the waste was likely to result in overland flow entering fresh water.42
[81] The s 32 report on PC8 says it introduces a package of provisions that will improve the current minimum standards for animal waste storage and subsequent land application in Otago, bringing the region into line with good practice across the country. One of the objectives for the Regional Council, as set out in the National Policy Statement for Freshwater Management 2014 (updated 2017) is objective C1:
To improve integrated management of fresh water and the use and development of land in whole catchments, including the interactions between fresh water, land, associated ecosystems and the coastal environment.
[82]The National Policy Statement also includes policy C1:
By every regional council:
…
(b) of managing fresh water and land use and development in catchments in an integrated and sustainable way to avoid, remedy or mitigate adverse effects, including cumulative effects.
[83] In PC8, the Regional Council sought to recognise the need for it to give effect to relevant national policy statements and, in particular, national policy statements for fresh water management that came into effect on 1 August 2014 with amendments in August 2017 that took effect on 7 September 2017.
[84] The Environment Court noted that none of the witnesses had considered PC8. In response to the Court’s request for the parties to identify by memorandum the planning documents relevant to the appeal, the parties had not mentioned PC8.
42 Regional Water Plan, rule 12.C.07.2.
[85] For the reasons already discussed,43 that did not limit the Environment Court’s ability to consider that proposed change in determining the appropriate duration for the consent.
[86] The Court raised what it considered to be relevant aspects of PC8 with witnesses and counsel. In particular, the Court had raised with planners giving evidence for both the District Council and the Regional Council, the Court’s concern over disaggregation of resource management and the importance of the need for integrated management of resources for the benefit of the environment.
[87] Counsel for both the District Council and Regional Council made submissions as to the weight to be given to PC8. In his final submissions to the Environment Court, counsel for the District Council emphasised that the take of the water, which was subject to the appeal, was for the purposes of the scheme.
[88] Both PC7 and PC8 were proposed plans for the purpose of s 104(1)(b)(vi) of the RMA. The weight to be given to PC7 and PC8 was a matter for the Environment Court. The Court noted the Regional Water Plan does not manage the storage of animal waste, and that discharge of animal waste is either a prohibited or allowed activity. The Court noted the Minister for the Environment considered “that the issues the plan changes aim to address have aroused widespread public concern or interest regarding their actual or likely effect on the environment.44
[89]In discussing PC7 and PC8, the Court said:45
We have considered Mr Peirce’s suggestion that the consent could be subject to an additional condition effectively constraining the supply of new water to farms with an up to date farm environment management plan. Such a condition is commended, but it does not address any present-day risk.
[90] On the hearing of the appeal in this Court, the District Council did not submit consideration of PC8 was an irrelevant matter. It was relevant if the Court could consider the actual or potential environmental effects of the end use of water from the scheme, as I have held they were entitled to.
43 At [32] and [33].
44 Clutha District Council v Otago Regional Council, above n 2, at [60].
45 At [62].
[91] The Court’s determination as to the weight to be given to a proposed plan or, in this case, proposed plan changes was a matter for the Court under its broad discretion under s 104. The determination it made is not one that can be challenged as involving an error of law.46
[92] The Environment Court ended its consideration of the evidence, including aspects of PC7 and PC8 by stating “[t]he above findings on effects weighs in favour of a decision confirming the consent duration”.47
[93] The Environment Court expressly considered the efficacy of a review condition proposed for the Council and also a further condition that might in future constrain the supply of new water to farms with an up to date farm environment management plan. Later in its decision when discussing whether there was a presumption that a take consent would be for 35 years unless there was good reason to depart from it, the Environment Court said:48
While the matter was not fully argued, we doubt the efficacy of any review condition where the potential adverse effects are caused by a third-person and not the consent holder (e.g. discharge of contaminants from dairy shed washdown).
[94] The Environment Court thus considered the possibility of the inclusion of a review clause as a potential reason for a longer duration for the consent. The view it reached as to its efficacy in this regard was a decision for it to make on the merits and not amenable to appeal as an error of law.
[95] I accordingly deal with the further questions of law as set out in the notice of appeal as follows:
A. Did the Environment Court apply a wrong legal test when determining that effects on the environment arising from the discharge of contaminants that may arise from the end-use of water by third parties was relevant to the take and use of water pursuant to Rule 12.1.3.1 of the Regional Plan?
No.
46 Smith Chilcott Ltd v Auckland City Council [2001] 3 NZLR 473 (CA) at [32]. See also Hunt v Auckland City Council [1996] NZRMA 49 (HC).
47 Clutha District Council v Otago Regional Council, above n 2, at [64].
48 At [72].
B. Did the Environment Court take into account irrelevant considerations in relation to the deficiencies in the ORC’s Regional Plan?
No.
C.Did the Environment Court err in its interpretation of Policy 6.4.19(1)(a)?
No.
D. Did the Environment Court take into account irrelevant considerations in determining that it could not give Policy 6.4.19(a) significant weight?
No.
E. Did the Environment Court take into account irrelevant considerations in its application of Policy 6.4.19(d) by [sic] when it determined that it needed to be satisfied of the adverse effects of the discharge of contaminants by third party users of water supplied to dairy sheds?
No.
F. Did the Environment Court err by taking into account an irrelevant matter, namely that the provisions of PC8 were relevant to the proceedings?
No.
G. Did the Environment Court err by giving weight to Policy 10A.2.3 when the status of the application is a controlled activity?
No. Evidence that there were no adverse effects arising from the take and use of water that were more than minor was contested. The effects of discharge of contaminants to the environment arising from the use of water by third parties was a relevant consideration.
H. Did the Environment Court err by not considering the efficacy of the review power pursuant to section s 128(1)(b) of the Act?
No.
I. Did the Environment Court err by finding that it could not be satisfied that the effects of the use are no more than minor under Policy 10A.2.3 when:
(a)The evidence was uncontested that there were no adverse effects arising from the take and use of water than were more than minor.
(b)The effects of discharge of contaminants to the environment arising from the use of water by third parties was an irrelevant consideration.
No. Given the effects arising from the end use of water were relevant considerations, the premises for the claimed error as referred to in (a) and
(b) had not been made out.
Did the Environment Court fail to apply authorities that held a permit term duration of less than 35 years should only be imposed if there is a good reason?
[96] The District Council submitted the consented water take was for “a community water supply to provide for the health and wellbeing of the South Bruce community” and the water delivery infrastructure required for the take had a design life of 100 years. The District Council submitted there was no evidence before the Environment Court that the community’s need for water would diminish between a period of 25 and 35 years so as to require a wholesale review of the resource consent after just 25 years.
[97] In Brooke-Taylor v Marlborough District Council, the Environment Court observed that requiring an applicant to submit a full application for a renewed consent in respect of which there was to be a major capital investment in infrastructure designed and intended to last a much longer period was not an efficient use of resources when potential adverse effects on the environment could be monitored and managed through the use of the review process under s 128 of the RMA.49
[98] The District Council’s submission was made on the basis that the end use of water from the scheme for dairy shed wash and the potential for the discharge of contaminants from such water was not a relevant consideration for the Environment Court. They accepted, if it was a relevant consideration, then the approach in Brooke- Taylor v Marlborough District Council would not, as a matter of law, have to apply to this consented take.
[99] It is clear the Environment Court did consider the value of the District Council’s investment in their assessment of the appropriate duration. They however said this was not determinative of the outcome. The Court said:50
49 Brooke-Taylor v Marlborough District Council EnvC Wellington W67/2004, 2 September 2004 at [69].
50 Clutha District Council v Otago Regional Council, above n 2, at [66].
A known but unquantified risk to investment yield must be the future impact of regulatory change on demand for water, particularly from the primary industry. Going forward, it is not known whether supply demand will soften.
[100] I also accept the submission for the Regional Council that the cases referred to by the District Council are not authority for the proposition that a take consent should be for 35 years when the applicant is investing in significant infrastructure to support the take. In Brooke-Taylor v Marlborough District Council and Ngati Rangi Trust v Genesis Power Ltd the consented takes were for the short duration of 10 years.51 It was that particular duration which was criticised by the Courts in the circumstances of those consents.
[101] As the Regional Council referred to in their submissions and as the Environment Court noted in Curador Trust v Northland Regional Council, s 123(d) of the RMA provides that a water permit can have a term up to 35 years if specified in the consent but will be for just five years if no term is specified in the consent.52 The presumptive period in the RMA is five years and the maximum period for which consent can be granted is 35 years. Accordingly, with reference to the legislation, there is no basis to suggest the presumption should be that a take consent will be granted for 35 years unless there is good reason to depart from that.
[102] As previously referred to, the Environment Court also expressly discussed the efficacy of a review clause as a potential reason for a longer duration for the water permit.
[103] Accordingly, the questions of law posed in the notice of appeal are answered as follows:
Did the Court start from the wrong premise, namely it failed to treat as its starting point that a term of 35 years should be allowed unless there is a good reason for a shorter term.
No.
51 Brooke-Taylor v Marlborough District Council, above n 49; Ngati Rangi Trust v Genesis Power Ltd, above n 21.
52 Curador Trust v Northland Regional Council EnvC Whangarei A069/2006, 31 May 2006 at [27].
Did the Court err by failing to find that a review condition under section 128 of the Act could adequately address any relevant concern about the exercise of the Water Permit for a duration of longer than 25 years.
No.
Did the Environment Court make an error of law by going beyond the scope of the proceedings and considering the likely future demand for and efficiency of the volume of water required for the water take?
[104] The Environment Court considered there was some uncertainty as to the future demand for the volume of water required for the water take. They considered there was potential for the demand to reduce due to future regulatory changes. They considered this would especially impact demand for water within the primary industry. The District Council’s submission as to this question was based on the premise that the water take was just for the scheme, and the way water from the scheme was ultimately used was not a relevant consideration.
[105] I have held the end use of water from the scheme was a relevant consideration. There was accordingly no error in the Environment Court allowing for the possibility that the demand for water for the scheme might reduce through regulatory control at some point in the future.
[106]There was no error of law in the manner posed by this question.
Did the Environment Court err in considering the provisions of the Kai Tahu Ki Otago Natural Resource Management Plan 2005?
[107] The fourth alleged error of law as set out in the notice of appeal was that the Environment Court had erred in:
… considering that [sic] provisions of the Kai Tahu Ki Otago Natural Resources Management Plan 2005 [the Environmental Iwi Management Plan] which fell outside the matters over which control is reserved in r 12.1.3.1, and the scope of policy 6.4.19 in the Regional Water Plan.
[108] A policy in the Kai Tahu Ki Otago Natural Resources Management Plan opposes the grant of permits for the taking of water for a period of 35 years.53 There is also a policy to protect and restore the mauri of all water.54
[109] The parties agreed the Environment and Iwi Management Plan was a relevant document for the Environment Court on appeal.
[110] In their pre-hearing memorandum as to agreed issues and facts before the Environment Court hearing, the parties agreed that amongst the issues for determination were:
4. Do the relevant provisions of the Kai Tahu Ki Otago Natural Resources Management Plan 2005 (NRMP) and Ngai Tahu Ki Murihiku Natural Resource and Environmental Iwi Management Plan 2008 – the Cry of the People, Te Tangi a Tauira (EIMP) oppose a consent term of 35 years in the circumstances of the present application?
…
11. What weight should be given to the NRMP and the EIMP?
12. Is a precautionary approach required to be reflected in a consent term due to the effects of the water take on Kai Tahu values?
[111] In its submissions on this appeal, the District Council criticised the reference to the iwi management plan on the basis the concerns the Court had expressed related to matters outside the controlled activity rule and the scope of the proceedings. The District Council submitted that:
On the basis that the adverse effects of the end-use of water are not a relevant effect of “allowing the activity,” … the Environment Court … misapplied the policies in the Iwi Management Plan (if they are relevant at all) and ought to have applied those policies with respect to the evidence before the Court which considered that there was no measurable effect on water quality of the waterbody from which abstraction was to occur.
[112] The Environment Court recognised that Te Ao Marama Inc and Te Rūnanga O Hokanui did not submit on the application for resource consent.
53 Kai Tahu ki Otago Natural Resources Management Plan 2005, policy 25 at [5.3.4].
54 Policy 4 at [5.3.4].
[113] I have held the matters which could be considered within the controlled activity rule and within the scope of the proceeding were wide enough to include the potential adverse effects on the environment of the end use of water.
[114] Accordingly, the Environment Court did not err in law as alleged with this question.
Conclusion
[115] The Environment Court did not err in law in considering the potential effects of the end use of water from the scheme for dairy shed wash in agreeing the duration of the water take consent for the scheme should be 25 years. There were no errors on the questions of law posed by the District Council in its notice of appeal.
[116]The District Council’s appeal is accordingly dismissed.
Costs
[117] The Regional Council is entitled to costs on a 2B basis. If there is any dispute as to those costs, the Regional Council is to file its memorandum within four weeks of this judgment. The District Council is to file a memorandum in reply within two weeks of receiving the Regional Council’s memorandum. The Regional Council may file a reply within two weeks of receiving the District Council’s memorandum. The memoranda are to be no longer than four pages. I will determine the issue of costs on the papers.
Solicitors:
Gallaway Cook Allan, Dunedin Wynn Williams, Christchurch.
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